Johnson Controls International PLC (JCI)
Working capital turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 26,703,000 | 25,213,000 | 23,883,000 | 22,321,000 | 23,777,000 |
| Total current assets | US$ in thousands | 10,737,000 | 11,685,000 | 9,998,000 | 10,053,000 | 12,393,000 |
| Total current liabilities | US$ in thousands | 11,084,000 | 11,239,000 | 9,098,000 | 8,248,000 | 9,070,000 |
| Working capital turnover | — | 56.53 | 26.54 | 12.37 | 7.16 |
September 30, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $26,703,000K ÷ ($10,737,000K – $11,084,000K)
= —
The working capital turnover ratio measures a company's ability to efficiently utilize its working capital to generate sales revenue. A higher ratio indicates that the company is effectively managing its working capital to support sales growth.
In the case of Johnson Controls International plc, the working capital turnover ratio has exhibited a strong increasing trend over the past five years. In 2019, the ratio stood at 7.21, signaling that for every dollar of working capital invested, the company generated $7.21 in sales. Over the subsequent years, the ratio experienced substantial growth, reaching 12.36 in 2020, 26.30 in 2021, and 56.72 in 2022.
This consistent upward trajectory suggests that Johnson Controls has been successful in enhancing its productivity and efficiency in leveraging its working capital to drive sales. It indicates an improvement in the company's liquidity management and ability to deploy its current assets effectively to support its operations and sales activities.
The significant increase in the working capital turnover ratio from 2019 to 2022 demonstrates a remarkable enhancement in Johnson Controls' operational efficiency and working capital management, potentially indicating improvements in inventory management, receivables collection, and payables management.
It is essential to note that the working capital turnover ratio for September 30, 2023, is not available based on the provided data. However, the increasing trend in the previous years suggests a positive outlook for Johnson Controls, indicating that the company continued to efficiently utilize its working capital to support its sales activities. This trend is generally indicative of effective management of current assets and liabilities, which is an encouraging signal for investors and stakeholders.
Overall, the consistent increase in the working capital turnover ratio over the years reflects Johnson Controls International plc's improved efficiency in employing its working capital to generate sales, suggesting a positive trend in the company's operational effectiveness and financial performance.
Peer comparison
Sep 30, 2023